Question

) On March 1, Shoshanah agreed to manufacture and sell a widget to Marshall for a total price of $50 000. He paid $20 000 immediately and promised to pay the remainder on June 15. The contract required Shoshanah to deliver the widget to Marshall on June 1. On April 15, Marshall spent $10 000 altering his production plant in a way that would accommodate the widget that he expected to receive from Shoshanah. On May 20, Shoshanah informed Marshall that she would not be able to deliver as promised. On June 1, the market value of a widget was $65 000. Marshall can acquire a similar widget for that amount, but he will have to once again spend $10 000 in renovations to his production plant to accommodate that substitute. (No two widgets are exactly alike and each one has unique requirements.)
Is Marshall entitled to receive damages? If so, on what basis and in what amount? Which one should he choose

Answer 1

Marshall can look to have the expectation damage as per the cause of action for the contract breach. The contract was started with an initial value of $50000 and an expected value of $65000 was to receive. As an amount of $20000 was paid to Shoshanah, only $30000 were left. When Shoshanah pays $35000 to him then only the contractual obligations can be met,

Otherwise, Marshall can also ask for the reliance damage as per the cause of action in the contract breach. In reliance on the contract, a sum of $20000 was paid to Shoshanah and a third party received $10000 for the renovation of the premise. These expenses were useless as per the contract as Shoshanah was not able to facilitate the widget. Thus Marshall can claim a sum of $30000 on the basis of reliance damage.

Marshall can choose any type of damage as the sum to be recovered is same in both the cases which is $30000